LEEDS_PLYWOOD_&_DOORS_LIM - Accounts

The directors present the strategic report for the year ended 30 September 2021.

The directors are pleased with the performance of the company during the year.

The directors have considered the impact of the coronavirus pandemic on the business. The trading results have been enhanced due to COVID19 buying patterns, however, these implications have reduced post year end. This has not changed the continuing growth trajectory of the business as pre-pandemic the business was expected to grow. This trajectory has continued post year end with a number of significant customer wins contributing to the growth.

The key business risks and uncertainties affecting the group are considered to relate to competition and market forces within the doors and furniture market.

The company continues to actively review the market conditions to ascertain any effect on sales. Foreign currency exchange rates are monitored on a regular basis to enable the business to make informed decisions on currency requirements. The business has a credit insurance policy to limit the risks of bad debts, but it is exposed to the usual credit and cashflow risk associated with selling on credit and manages this through credit control procedures. Aside from an exposure to foreign currency fluctuations, the nature of the company’s financial instruments means that they are not subject to a price or liquidity risk.

Development and performance

The directors are satisfied with the position of the company at the year end.

Trading within the doors and furniture sector requires the company to continually develop its offering and ensure it remains at the forefront of design and trends in the product offering. The company continues to invest in marketing and technology with the aim of further growth.

The cash position remains satisfactory and stock levels are continually monitored to balance reasonable stock turn with the ability to better service customer needs.

In accordance with section 172 of the Companies Act 2006 each of our directors acts in a way that he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. The Directors are aware of how important building and maintaining successful relationship with stakeholders are to the business; be it employees, customers, suppliers and the wider community. In making decisions, the Directors take account not only of the short term requirements of the business, but also of the longer term impact on these stakeholders.

Employees – the company views pay and benefits as just one element of the needs of staff and is highly aware of the need to look after the security and welfare of its staff. Training and development are considered where support is required or career paths identify promotional opportunities.

Customers - Engagement with our customers is essential, this is achieved though feedback, social media activity and promotional information. Providing our customers with the products and services they require at right time is imperative to building and maintaining our relationship.

Suppliers – Maintaining good relationship with suppliers over the longer term contributes to the success of the business and the promotion of brand loyalty. Allowing local business the opportunity to be represented on site also benefits our customers, suppliers and the wider community.

The company agrees terms and conditions which include payment details with its suppliers. Payment is made in accordance with those terms and conditions, provided the supplier had complied with them.

High standards of business conduct

Recognising the important role that our trading partners and customers play, and developing trusted, long-term relationships is an integral part of our business. We are proud to have many customers that have been with us from the start.

Our environmental policy

The company takes its responsibilities very seriously, striving to make a positive contribution to minimise the impact of its activities on the environment. We are fully committed to upholding the principles of Chain of Custody and sustainable sources, aligning ourselves with manufacturers who source their materials from sustainable sources and auditable processes. The company is committed to the following:

• To meet or exceed all the environmental legislation that relates to the Company's activities.

• Wherever and whenever economically practicable, endeavor to use environmentally and sustainable materials.

• Where feasible, strive towards the continual reduction of all waste streams, to air, water and land.

• Wherever commercially viable, recycle and reuse any materials that would otherwise go to landfill.

• To regularly monitor energy usage in order to reduce overall consumption.

• To communicate the policy internally and place it in the public domain.

• To establish and regularly review all environmental and sustainable objectives in respect of this policy.

Being a major force in the timber related industry we are fully committed to upholding the principles of FSC, Forest Stewardship Council and PEFC, Programme for the Endorsement of Forest Certification, and aligning ourselves with manufacturers who meet these criteria. We are proud to say that an ever-increasing number of our products meet this criterion. Where items are not currently sourced within FSC or PEFC we ensure due diligence is completed on our supply chain and compliance with regulatory requirements.

Social, community and human rights issues

The company has a zero tolerance approach to any form of modern slavery. We are committed to acting ethically and with integrity and transparency in all business dealings and implementing effective systems and controls to safeguard against any form of modern slavery taking place within the business or our supply chain. A more comprehensive statement can be found on our website.

Operating Profit was £5.8m (2020 - £3.9m).

The group's key performance indicators during the year were as follows:

                        2021        2020

Turnover                        £66.6m        £48.2m

Gross Profit margin                28%        28%

Profit before tax                    £5.6m        £3.7m

Following the year end, on 01 June 2022, 100% of the shares in the immediate parent company LPD (Holdings) Limited were acquired by LPD Group Holdings Ltd. Post year end, the ultimate parent company is therefore LPD Group Holdings Ltd.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 September 2021.

The principal activity of the company continues to be the import and distribution of quality doors and furniture.

The results for the year are set out on page 12.

An interim ordinary dividend was paid amounting to £nil (2020 - £315,000). The directors do not recommend payment of a final dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Azets Audit Services Limited were appointed auditor to the company following their acquisition of the trade of Garbutt & Elliott Audit Limited on 1 December 2021 and in accordance with s487(2) of the Companies Act 2006 they are deemed reappointed annually.

In accordance with section 172 of the Companies Act 2006 each of our directors acts in a way that he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. The Directors are aware of how important building and maintaining successful relationship with stakeholders are to the business; be it employees, customers, suppliers and the wider community. In making decisions, the Directors take account not only of the short term requirements of the business, but also of the longer term impact on these stakeholders.

Employees – the company views pay and benefits as just one element of the needs of staff and is highly aware of the need to look after the security and welfare of its staff. Training and development are considered where support is required or career paths identify promotional opportunities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

This report is in compliance with The Companies (Directors Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (“the 2018 Regulations”) implementing the government’s policy on Streamlined Energy and Carbon Reporting (SECR) that came into force on 1st April 2019.

The regulation sets out the obligation to report our UK energy use and associated greenhouse gas emissions relating to gas, electricity and transport fuel as well as an intensity ratio and information relating to energy efficiency action within our business.

The group has been at the forefront of manufacturing, importing, and distributing internal and external door for 40 years. Operating a fleet of delivery vehicles from our base in Leeds the boundary of our disclosures has been set as those emissions within our financial control. These include the heating and running of our offices and warehouses, the operation of our fleet of lorries and cars.

Data Collection and Methodology

The following data was collated and assessed for completeness, accuracy and prepared on actuals and estimates for this base line report from.

• Monthly LPG purchases

• Monthly Electricity bills

• Monthly fuel purchases

Fuel measurements have been taken from our fleet management system and relevant emission rates applied. Company Car measurements have been taken from using a mean ratio to derive full coverage for mileage and emissions. Electricity figures were obtained from monthly readings and relevant rates applied. Propane figures were obtained from monthly measured figures and relevant rates applied. Relevant multipliers were then applied, using values from UK Government and Carbon Trust information.

Intensity Ratios

The primary intensity ratio of total CO2e per £100,000 turnover has been used for the base line year. This figure is £5,600 Kg CO2 e.

Fuel purchases (£) were converted to litres of diesel using Gov.UK statistical data sets 2020 average price for fuel and multiplied by 2.54603 to produce kg Co2e figures. Electricity (kWh) and gas (litres) were multiplied by 0.23314 and 0.18387 respectfully to derive the total emissions for LPD. The multipliers have been taken from the UK Government GHG Conversion Factors for Company Reporting 2020.

Intensity ratios

The primary intensity ratio of total Co2e per £100,000 turnover has been used for the base line year. This figure is £3,753kg Co2e,

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Leeds Plywood & Doors Limited (the 'company') for the year ended 30 September 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 30 September 2021 and of its profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Extent to which the audit was capable of identifying irregularities, including fraud

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management, and from inspection of the company's regulatory and legal correspondence. We discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance during the audit.

The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, pensions legislation, taxation legislation and further laws and regulations that could indirectly affect the financial statements, comprising environmental, health and safety legislation and, in the current climate, covid regulations. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These procedures did not identify any potentially material actual or suspected noncompliance.

To identify risks of material misstatement due to fraud we considered the opportunities and incentives and pressures that may exist within the company to commit fraud. Our risk assessment procedures included: enquiry of directors to understand the high level policies and procedures in place to prevent and detect fraud, reading Board minutes and considering performance targets and incentive schemes in place for management. We communicated identified fraud risks throughout our team and remained alert to any indications of fraud during the audit.

As a result of these procedures we identified the greatest potential for fraud in the following areas:

- revenue recognition; and

- subjective accounting estimates.

Both risks arise due to a potential desire to present stronger results to benefit management interests, including enhanced incentives. As required by auditing standards we also identified and addressed the risk of management override of controls.

We performed the following procedures to address the risks of fraud identified:

- identifying and testing high risk journal entries through vouching the entries to supporting documentation;

- assessing significant accounting estimates for bias; and

- testing the timing and recognition of income.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Leeds Plywood & Doors Limited is a private company limited by shares incorporated in England and Wales. The registered office is Midland Road, Leeds, LS10 2RJ.

These financial statements have been prepared in accordance with “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

On the grounds that the company's results are consolidated into its parent, as disclosed in note 30, the company has taken advantage of certain exemptions conferred by section 1.11 of FRS 102 as follows:

• Exemption from presenting a statement of cash flows as a primary note to the financial statements;

• Exemption from disclosing details of its financial instruments;

• Exemption from disclosing key management personnel remuneration.

The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS 102 which permit it to not present details of its transactions with members of the group headed by LPD (Holdings) Limited where relevant group companies are all wholly owned.

The ultimate parent company is LPD (Holdings) Limited which is the smallest and largest group into which these financial statements are consolidated. LPD (Holdings) Limited's registered office is Midland Road, Leeds, LS10 2RJ.

During the trueprevious year the COVID-19 virus was declared a pandemic and the impact on the global economy has been unprecedented in both its speed and severity. The Directors have continued to prepare the financial statements on the going concern basis of accounting in preparing the financial statements. They believe the company has continued to perform significantly well and generate growth. The company has significant external finance and the Directors believe on balance that the company has sufficient funds to make repayments and enable trading to continue for a period of at least 12 months from the date of approval of the financial statements.

Turnover is recognised at the fair value of the consideration received or receivable for the sale of doors and furniture provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of doors and furniture is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Intangible assets represents software separately acquired.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following basis:

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Fixed asset investments represent capitalised costs for the purchase of racehorses. The cost of racehorses is released to profit and loss on a straight line basis over 4 years, being the estimated period each horse remains in training.

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The depreciation and amortisation policies have been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation and amortisation charged during the year was £819,077 (2020 - £735,585) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.

Inventories are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.

Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and therefore are able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).

An analysis of the company's turnover is as follows:

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

The depreciation charge for the year in respect of assets held under finance leases or hire purchase contracts was £685,829 (2020 - £600,643). £8,239 (2020 - £19,409) relates to fixtures, fittings and equipment and £677,590 (2020 - £581,234) relates to motor vehicles.

Finance lease liabilities are secured against the assets to which they relate. See Note 19.

Other bank borrowings represent debt factoring and trade finance facilities which are secured by fixed and floating charges over the assets of the company.

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

Finance lease liabilities are secured against the assets to which they relate.

Obligations under finance leases are secured as detailed in note 19.

Other bank borrowings are secured as detailed in note 18.

Obligations under finance leases are secured as detailed in note 19.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.

The UK corporation tax rate was 19% throughout the year.

In the March 2021 Budget, a change to the future UK corporation tax rate was announced, indicating that the rate will increase to 25% from April 2023. Deferred tax balances at the reporting date are therefore measured at 25% (2020 - 19%).

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

The company is party to a group guarantee over any bank loans and overdrafts which may from time to time arise. At the year end, bank loans and overdrafts of relevant group companies totalled £1,905,774 (2020 - £1,857,931) net of cash balances.

As at the date of approval of the financial statements, no default has occurred which would trigger the above liability, nor is one anticipated. As such, the directors consider that the fair value of this obligation is £nil, and as such there is no recognition of the liability on the balance sheet.

At the balance sheet date the company was committed to buy $10,300,000 and €1,000,000 (2020 - $3,470,000 and €600,000 ) under forward foreign exchange contracts.

Operating lease payments represent rentals payable by the company for certain of its properties and assets. Leases are negotiated for an average term of 3 years and rentals are fixed.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Following the year end, on 01 June 2022, 100% of the shares in the immediate parent company LPD (Holdings) Limited were acquired by LPD Group Holdings Ltd. Post year end, the ultimate parent company is therefore LPD Group Holdings Ltd.

The company has taken advantage of the exemption available in Section 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group.

Included within the other receivables is an amount owed by the executors of the late Mr J D Gordon of £334,506 as at 30 September 2021.

Loans have been granted by the group to its directors as below. The balance is included within debtors; amounts falling due within one year: other debtors.

The ultimate parent company and controlling party is LPD (Holdings) Limited, a company registered in England and Wales with registered office Midland Road, Leeds, LS10 2RJ. LPD (Holdings) Limited is the smallest and largest group into which the company is consolidated.

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2020 - 5)